Case Process Analyses – Setting a Cookie Company
find two attached files, the world file includes the case study and the questions, there are two parts of questions you are kindly asked to answer the second part
“where I says assignment questions” and you will find the answers of the first parts in the pdf file which may help you.
Case Process Analyses – Setting a Cookie Company
You and your roommate are preparing to start a Cookie Company in your on-campus apartment. The company will provide fresh cookies to starving students late at night.
You need to evaluate the preliminary design for the company’s production process to figure out many variables, including what prices to charge, whether you will be
able to make a profit, and how many orders to accept.
Your idea is to bake fresh cookies to order, using any combination of ingredients that the buyer wants. The cookies will be ready for pickup at your apartment within
an hour. Several factors will set you apart from competing products such as store-bought cookies. First, your cookies will be completely fresh. You will not bake any
cookies before receiving the order; therefore, the buyer will be getting cookies that are literally hot out of the oven. Second, you will have a variety of ingredients
available to add to the basic dough, including chocolate chips, M&M’s, chopped Heath bars, coconut, walnuts, and raisins. Buyers will telephone in their orders and
specify which of these ingredients they want in their cookies. You guarantee completely fresh cookies. In short, you will have the freshest, most exotic cookies
anywhere, available right on campus.
THE PRODUCTION PROCESS
Baking cookies is simple: mix all the ingredients in a food processor; spoon out the cookie dough onto a tray; put the cookies into the oven; bake them; take the tray
of cookies out of the oven; let the cookies cool; and, finally, take the cookies off the tray and carefully pack them in a box. You and your roommate already own all
the necessary capital equipment: one food processor, cookie trays, and spoons. Your apartment has a small oven that will hold one tray at a time. Your landlord pays
for all the electricity. The variable costs, therefore, are merely the cost of the ingredients (estimated to be $0.60/dozen), the cost of the box in which the cookies
are packed ($0.10 per box; each box holds a dozen cookies), and your time (what value do you place on your time?).
A detailed examination of the production process, which specifies how long each of the steps will take, follows. The first step is to take an order, which your
roommate has figured out how to do quickly and with 100 percent accuracy. (Actually, you and your roommate devised a method using the campus electronic mail system to
accept orders and to inform customers when their orders will be ready for pickup. Because this runs automatically on your personal computer, it does not take any of
your time.) Therefore, this step will be ignored in further analysis.
You and your roommate have timed the necessary physical operations. The first physical production step is to wash out the mixing bowl from the previous batch, add
all of the ingredients, and mix them in your food processor. The mixing bowls hold ingredients for up to 3 dozen cookies. You then dish up the cookies, one dozen at a
time, onto a
cookie tray. These activities take six minutes for the washing and mixing steps, regardless of how many cookies are being made in the batch. That is, to mix enough
dough and ingredients for two dozen cookies takes the same six minutes as one dozen cookies. However, dishing up the cookies onto the tray takes two minutes per tray.
The next step, performed by your roommate, is to put the cookies in the oven and set the thermostat and timer, which takes about one minute. The cookies bake for
the next nine minutes. So total baking time is 10 minutes, during the first minute of which your roommate is busy setting the oven. Because the oven holds only one
tray, a second dozen takes an additional 10 minutes to bake.
Your roommate also performs the last steps of the process by first removing the cookies from the oven and putting them aside to cool for 5 minutes, then carefully
packing them in a box and accepting payment. Removing the cookies from the oven takes only a negligible amount of time, but it must be done promptly. It takes two
minutes to pack each dozen and about one minute to accept payment for the order.
That is the process for producing cookies by the dozen in Kristen’s Cookie Company. As experienced bakers know, a few simplifications were made in the actual cookie
production process. For example, the first batch of cookies for the night requires preheating the oven. However, such complexities will be put aside for now. Begin
your analysis by developing a process flow diagram of the cookie-making process.
KEY QUESTIONS TO ANSWER BEFORE YOU LAUNCH THE BUSINESS
To launch the business, you need to set prices and rules for accepting orders. Some issues will be resolved only after you get started and try out different ways of
producing the cookies. Before you start, however, you at least want a
preliminary plan, with as much as possible specified, so that you can do a careful calculation of how much time you will have to devote to this business each night,
and how much money you can expect to make. For example, when you conduct a market survey to determine the likely demand, you will want to specify exactly what your
order policies will be. Therefore, answering the following operational questions should help you:
The answer of these 6 questions are attached in the other file:
1. How long will it take you to fill a rush order?
2. How many orders can you fill in a night, assuming you are open four hours each night?
3. How much of your own and your roommate’s valuable time will it take to fill each order?
4. Because your baking trays can hold exactly one dozen cookies, you will produce and sell cookies by the dozen. Should you give any discount for people who order
two dozen cookies, three dozen cookies, or more? If so, how much? Will it take you any longer to fill a two-dozen cookie order than a one-dozen cookie order?
5. How many food processors and baking trays will you need?
6. Are there any changes you can make in your production plans that will allow you to make better cookies or more cookies in less time or at lower cost? For
example, is there a bottleneck operation in your production process that you can expand cheaply? What is the effect of adding another oven? How much would you be
willing to pay to rent an additional oven?
From here the assignment start
Assignment Case Study 1 Process Analyses – Cookie Company
• This is an individual assignment.
• It is worth 7.5% of the final grade.
• The completed assignment (pdf) must be submitted on Blackboard by Sunday, 29th March 2015 (Midnight)
• Please support your answers/recommendations with analyses and calculations on the data provided in the case study and the concepts/learnings from Chapter 11
(Process Design and Analyses).
Assignment Questions –
1. What happens if you are trying to do this by yourself without a roommate? 1.5 Marks
2. Should you offer special rates for rush orders? Suppose you have just put a tray of cookies 1.5 Marks into the oven and someone calls up with a “crash
priority” order for a dozen cookies of a different flavor. Can you fill the priority order while still fulfilling the order for the cookies that are already in the
oven? If not, how much of a premium should you charge for filling the rush order?
3. When should you promise delivery? How can you look quickly at your order board (list of pending orders) and tell a caller when his or her order will be ready? How
much of a safety margin for timing should you allow? 1.5 Marks
4. What other factors should you consider at this stage of planning your business? 1.5 Marks
5. Your product must be made to order because each order is potentially unique. If you decide to sell standard cookies instead, how should you change the production
system? The ordertaking process? 1.5 Marks
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